Journal Press India^®

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The cognitive perspective on strategy (Mintzberg et al., 1998; Jenkins & Ambrosini, 2002; Sparrow, 1994), in which  this paper  is nested, argues that top managers very often  resort  to a simplified representation of the organizational stimuli in the form  of mental models due to their  limited cognitive capacities (Schwenk, 1988). The cognitive school on strategy broke new ground when Daniels (1998) established that affect influences strategic cognition, and Daniels (1999) showed that negative affect could influence managers’ perceptions of aspects of the strategic environment. We examine whether managerial perceptions of competitive advantage in terms of firm resources and capabilities might be biased toward optimistic or pessimistic interpretations depending on the nature of strategic actors’  affective state. Data were collected from senior managers attending a management development program at  a business school. Our findings indicate that positive affective states yield favorable perceptions of competitive advantage in terms of firm resources and capabilities.

Keywords

Managerial Cognition, Affective States, Mental Models, Cognitive Strategy.

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